Article ID Journal Published Year Pages File Type
5071522 Games and Economic Behavior 2016 6 Pages PDF
Abstract
A discrete version of Crawford and Sobel's (1982) cheap talk model is considered. Unlike in the continuous case, limiting attention to partitional equilibria is with loss of generality. The need to consider equilibria that are non-partitional complicates the analysis. It is shown that if utility functions are concave and the sender is upwardly biased, then the receiver's optimal equilibrium is necessarily partitional. Based on this result, a simple characterization of the optimal equilibrium for the discrete uniform quadratic case is proposed.
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Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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